Trump orders blockade of oil tankers in Venezuela

Donald Trump has ordered a blockade of all sanctioned oil tankers entering and leaving Venezuela, a move set to sharply escalate tensions between Washington and Caracas as he targets Venezuela's main source of income. It is unclear how the Trump administration ?will impose the blockade against the sanctioned vessels, and whether he will turn to the Coast Guard to interdict vessels like he did last week. The administration has moved thousands of troops ?and nearly a dozen warships - including an aircraft carrier - to the region in recent months. "For the theft of our Assets, and many other reasons, including Terrorism, Drug Smuggling, and Human Trafficking, the Venezuelan Regime has been designated a FOREIGN TERRORIST ORGANIZATION," the president wrote on Truth Social on Tuesday. "Therefore, today, I am ordering A TOTAL AND COMPLETE BLOCKADE OF ALL SANCTIONED OIL TANKERS going into, and out of, Venezuela." US crude futures climbed over one per cent to $US55.96 ($A84.29) a barrel in Asian trading after Trump's announcement. Oil prices settled at $US55.27 ($A83.25) a barrel on Tuesday, the lowest close since February 2021. Oil ?market participants said prices ?were rising in anticipation of a potential reduction in Venezuelan exports, although they were still waiting to see how Trump's blockade would be enforced and ?whether it would extend to include non-sanctioned vessels. "We don't know how much or how quickly Trump will enforce this," said Rory Johnston, founder of oil markets-focused newsletter Commodity Context. There has been an effective embargo in place after the US seized a sanctioned oil tanker off the coast of Venezuela last week, with loaded vessels carrying millions of barrels of oil staying in Venezuelan waters rather than risk seizure. Since the seizure, Venezuelan crude exports have fallen sharply, a situation worsened by a cyberattack that knocked down state-run PDVSA's administrative systems this ?week. While many vessels picking up oil in Venezuela are under sanctions, others transporting the country's oil ?and crude from Iran and Russia have not been sanctioned, and some companies, particularly the US' Chevron, transport Venezuelan oil in their own authorised ships. For now, the oil market is well supplied and there are millions of ?barrels of oil on tankers off the coast of China waiting to offload. If the embargo stays in place for some time, then the loss of nearly a ?million barrels a day of crude supply is likely to push oil prices higher. Maduro, speaking at an event on Tuesday evening before Trump's post, ?said, "Imperialism ?and the fascist right want to colonise Venezuela to take over its ?wealth of oil, gas, gold, among other minerals. We have sworn absolutely to defend our homeland ?and in Venezuela peace will triumph". Trump's campaign has included a ramped-up military presence in the region and more than two dozen military strikes on vessels in the Pacific Ocean and Caribbean Sea near Venezuela, which have killed at least 90 people. Trump has also said that US land strikes on the South American country will soon start. In wide-ranging interviews with Vanity Fair, Susie Wiles, Trump's chief of staff, said the boat strikes were aimed at putting pressure on Maduro. "He wants to keep on blowing boats up until Maduro cries uncle," the magazine quoted Wiles as saying in an article published on Tuesday. Maduro has alleged that the US military build-up is aimed at overthrowing him and gaining control of the OPEC nation's oil resources, which are the world's ?largest crude reserves.